Loading ....This Friggen Game called Wall Street is Nucken Futz…I am gonna take all my chips and cash em in….…..dont wanna play this corrupt rigged game any more…
…..just gonna cash in and convert to Phys….
…..honest …i will
Fully, you have mail.
To all; another “wow, what a day”. On the chopping block now is AIG. They are the world’s largest insurance company and have so many crossdealings and derivatives it is mindboggling. They are probably more important than any of the other past failures. The government said yesterday that a “private solution” was necessary as the Treasury would not step up to the plate. Today it looks like the banking system is saying “we don’t have the money”. I believe the Treasury absolutely cannot let AIG fail. If AIG fails, I do not believe the markets can remain open for more than a few days at most. An example of this financial crisis is Lehman’s British landlord disclosing that AIG is the insurer in case Lehman can’t pay their rent. The amounts and types of insurance that will fail with AIG are staggering. AIG is broke. The government can lend to AIG but that doesn’t solve the problems, it only buys time. Though I don’t think much.
The other big news today is the Fed meeting. I won’t speculate whether no cut, .25, or .50 drop in rates. IT DOESN’T MATTER! I have always maintained that one day the financial system would be so fragile and so rotten to the core that the Fed would cut rates followed by a market crash. Today, tomorrow or Thursday could fit this bill. If the Fed cuts a half point today and that action is followed by weakness, panic will grip Wall Street. This is a part of the psychology change I’ve been talking about. If we get serious weakness after a Fed action, the “government will fix everything, can’t happen here” psychology will be snapped in half. There is more leverage in the system today than there was last year, not because of all the Federal loans but because there is LESS EQUITY. Equity has been destroyed over the last 18 month leaving the system more and more fragile. I believe there is less chance of being struck by lightning in a storm while holding a 1 iron up while wearing steel spikes than this financial system surviving.
This is it! We have witnessed too many shocking events, the #3, 4, and 5 brokers failing, the largest private mortgage company and the governments 2 mortgage companies collapsing, the bond insurers, the nations largest savings and loan, and now the world’s largest insurance company. AIG is going upside down, even with a bailout, it is now too obvious for all to see that IT is over. Foreigners know it, big money knows it, I think Joe sixpack has even figured it out now. All that remains now is for the bagpipes to start playing. The financial system will certainly be a changed animal going forward. Our current fiat system is untenable and unsaveable. Regards, Bill H.
Click here: Global banks brace for derivative blow-up | The Australian
Money-Market Rates Double Amid Global Credit Seizure
Sept. 16 (Bloomberg) — The cost of borrowing in dollars overnight more than doubled to the highest since 2001 as the collapse of Lehman Brothers Holdings Inc. and credit downgrades of American International Group Inc. led banks to hoard cash.
The London interbank offered rate, or Libor, that financial institutions charge each other to borrow soared 3.33 percentage points to 6.44 percent today, its biggest jump in at least seven years, according to the British Bankers’ Association. The rate was as low as 2.07 percent in June.
Banks are driving up short-term lending rates on concern that AIG, the biggest U.S. insurer, will follow Lehman into bankruptcy and leave financial institutions with losses on $441 billion of credit derivatives. Central banks around the world pumped more than $210 billion into the financial system as they sought to alleviate the credit-market seizure.
“It’s fear,’ said Imke Jersch, a senior money-market trader in Hanover at Norddeutsche Landesbank Girozentrale AG, Germany’s fourth-biggest state-owned bank. “You don’t know who has exposure and who might not be getting their money anymore. It’s a domino effect. You never know who might fall next.’…
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U.S. Mortgage Rates May Wreak Further Havoc After Libor Climbs
Sept. 16 (Bloomberg) — The biggest jump in the London interbank lending rate in seven years could wreak further havoc on the U.S. housing market and there’s nothing the Federal Reserve can do about it. About 6 million U.S. mortgages, including almost all subprime home loans and 41 percent of prime ARMs, are linked to the London Interbank Offered Rate, or Libor, according to First American CoreLogic in Santa Ana, California. Today’s rate more than doubled after Lehman Brothers Holdings Inc. collapsed and American International Group Inc. struggled to stave off bankruptcy. If it remains elevated, it will boost the one-month to one-year Libor indexes that average the daily rate, said Keith Gumbinger, vice president of HSH Associates Inc., a Pompton Plains, New Jersey- based
mortgage research firm.
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AND YET GOLD GOES NOWHERE!
13:36 Hedge funds playing in their own backyard - WSJ
In a “Heard on the Street” column, the Journal reports that hedge funds have begun to turn on each other. According to the article, funds believe they can take advantage of the pain inflicting some of their adversaries by dumping or shorting popular holdings of other hedge funds. Of interest, the column notes that stocks such as AK Steel (AKS) and Freeport-McMoRan (FCX), two widely held stocks in the hedge fund community, are each down more than 17% this week, while others such as Calpine (CPN) and Focus Media (FMCN), are down more than 20% since late August.
Reference Link (subscription required)
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From Café member BCG…
Things to note:
MEETING ONE:
1 - One had a dinner with the Central Bank Governors in Jackson Hole last month. They were all sanguine about the credit crisis.
(these guys have been behind the curve for the past year. When will they wake up? Terribly concerning in my opinion).
MEETING TWO:
2 - AIG debt and debt insured by AIG for the most part has not been held by institutions or individuals but because it has been rated AAA, it has been held by financial institutions - namely banks. This will impact a lot of banks Tier 1 ratios. AAA can be leveraged basically 100 to 1. Single A? Much less? Less than Single A? Probably 1-to-1. Banks forced to reduce the size of their balance sheets once again. AIG has US$447 Billion in Credit Default Swap exposure in total.
3 - One of the guys I met today stated that both WaMu and National City are toast. He thinks WaMu by the end of the week. He thinks National City is in worse shape, yet the market doesn’t realize it.
4 - Thinks that the FDIC will be slow in shutting banks down, at least those of any substantive size until after the election so that they are not accused of making political decisions. Look for the FDIC, etc. to be much more aggressive starting in early 2009.
Internally, we’re seeing no problems with overnight financing from Chinese Banks. Almost all European and US banks are refusing to offer overnight money at the moment. They claim that they are “too busy.” I’m presuming that a large amount of capital is being tied up to deal with Lehman counterparty risk issues.
As for me, I’m instructing my broker to open a Custodian Account for me today. Anything I own outside of my short-term trading portfolio will be transferred into this account. If I sense that they are next in line to go under, I’ll liquidate it all and have 100% of my assets placed into the Custodial account.
Pretty depressing day.
p.s. One other point. Meeting two guy also stated that JP Morgan’s leverage is 27-1 on balance sheet. Including off balance sheet, the ratio is closer to 50-1. He thinks there is irrational faith in Jamie Dimon and JP Morgan and that it is very vulnerable if the perception of JP Morgan turns (which he thinks will). Funny enough, he thinks Citi is okay - at least on a relative basis…..
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The latest on oil besides the incredible price plunge…
Nigerian militants sabotage oil facilities
Sep 16, 2008 07:30 EST
PORT HARCOURT, Nigeria, Sept 16 (Reuters) - Nigerian militants attacked two oil installations in the Niger Delta in the heaviest fighting there in two years, militants and security sources said on Tuesday…
wiredispatch.com/news/?id=352243
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MMS Says Most Gulf Production Still Shut-in
Offshore oil and gas operators in the Gulf of Mexico are reboarding platforms and rigs and restoring production following both Hurricane Gustav and Hurricane Ike. The Minerals Management Service is monitoring activities for both hurricanes through its Continuity of Operations Plan team. This team will be activated until operations return to normal
www.rigzone.com/news/article.asp?a_id=66667
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Jesse:
Banks and thrifts most likely to fail, ex-bailouts.
jessescrossroadscafe.blogspot.com/2008/09/underperf
orming-banks-and-thrifts-most.html
JPMorgan Gave Lehman $138 Billion After Bankruptcy
Sept. 16 (Bloomberg) — Lehman Brothers Holdings Inc., the securities firm that filed the biggest bankruptcy in history yesterday, was advanced $138 billion this week by JPMorgan Chase & Co. to settle Lehman trades and keep financial markets stable, according to a court filing.
One advance of $87 billion was made on Sept. 15 after the pre-dawn filing, and another of $51 billion was made the following day, according to a bankruptcy court documents posted today. Both were made to settle securities transactions with customers of Lehman and its clearance parties, the filings said.
The advances were necessary “to avoid a disruption of the financial markets,’ Lehman said in the filing.
The first advance was repaid by the Federal Reserve Bank of New York, Lehman said. The bank didn’t say if the second amount was repaid. Both advances were “guaranteed by Lehman’ through collateral of the firm’s holding company, the filing said. The advances were made at the request of Lehman and the Federal Reserve, according to the filing.
Lehman disclosed the advances in a motion seeking court permission to give JPMorgan’s claims special status in its attempts to recover any advances. Lehman said that if that status isn’t granted, JPMorgan may not be able to make future advances needed to clear and settle trades.
“The granting of the relief requested is in the best interests of the estate and its stakeholders and the public markets,’ Lehman said, adding the advances would be “essential to Lehman’s customers.’
JPMorgan may make future advances at its sole discretion, all of which would be guaranteed by Lehman under its agreement to pledge collateral, Lehman said.
JPMorgan said in a statement in court documents that it has had a clearing agreement with Lehman since June 2000, and had pledged its collateral under an Aug. 26 guarantee.
JPMorgan lawyer Harold Novikoff and JPMorgan spokesman Brian Marchiony didn’t immediately return calls for comment.
The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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Garic pitches in with…
“Paulson gets on national television and says no tax payer money will be provided for Lehman Brothers; yet, the Federal Reserve advances $138B in one day to Lehman’s counterparties through J.P.Morgan. This makes Bill Clinton saying I did not have sex with her on national television meaningless.” And to think there are still a few nebishes out there who still won’t admit the US government, via its hit men like Morgan, are all over the gold and silver markets!
Love our free markets!
More amazing to me then the Silver price is your logic. Then Silver is at or near it’s natural price?
– The Federal Reserve says it is taking over crumbling insurance giant AIG in an $85 billion rescue plan.
I often wondered why short selling can’t be made illegal based upon Market Cap. Say anything in the S&P 500, then short away…anything beneath that then it’s illegal.
At the least, forbid short selling of the Guppy’s.
It could have gotten pretty U-G-L-Y had they not brought out the “stick save” of floating the news that the FED would give AIG a meer 85billion. Of course, if you have any PM stocks you are glad that it happened - as pm stocks were trading with the market and NOT on the price of gold or silver today! JMO
It’s not about the naked short selling that is driving down 85% of the entire world markets IMHO. No, it’s the out of control rumors that are being floated in this internet age and the HUGE bets against these companies that are made in the options market. These huge, speculative bets [simple contracts between 2 parties to sell/buy a stock at a certain price and date] toy with investor’s confidence and then the rumors are floated.
The options market is pretty transparent to the point where individuals like you and me can watch and analyze what is happening and attempt to swim next to the big fish. People are clearly pyramiding their winnings and becoming dedicated short sellers.
IMHO this activity - as cruel as it seems - is the means & method for the market to get to the levels where it really should be. Let’s face it, the market would not be going down if there was not a fundamental, economic reason for it to do so. Eventually the bears will become too greedy and a bottom will be put in.
Friends told me we had a blue moon here last night in Ontario.
Was bright white this morning.
gotta get some sleep; these markets are wild; look at Russia. good grief.
I know looking at the charts are not helping the bull case for gold, but the Fundementals for gold are screaming BUY me before you can not afford me. I’m saying were going to see $50- $100 up day very soon. Just a gut feeling no TA or FA to back that up 
Keep this on your browser and choose your preference when desired.
http://arch0708.goldtent.net/2007/04/07/heres-a-list-of-emoticons-for-this-site/
Moggy
Hi floridagold; thanks for the reply. There is no going back because the old way was ignored with impunity. The exchanges have to make it illegal so that there is no fudging. Until then there will be no trust.
I watched the market for about an hour after the Fed announcement. The larger issues like aem rose, but with volatility. The smaller ones that I watched went lower, until the last half hour or so. Then they rose.
Not sure that I trust that. It seems a bit like a Friday rise into a weekend like we saw last Friday. Then look what happened when Monday arrived and the market dealt with the news.
This talk of AIG. And the gold chart is stuck in neutral. Someone explain what in this chart is a screaming buy.
quotes.ino.com/chart/?s=FOREX_XAUUSDO&v=d3
It’s in a downtrend and is up against horizontal resistance. Liquidity is the order of the day.
Look at AEM. Double top has been back tested; with much lower po.
stockcharts.com/h-sc/ui?s=AEM&p=W&yr=1&mn=3&dy=0&id=p96621901606